Banks' Losses To Boy Band Mogul Not Covered: Court

Law360, New York (July 30, 2009, 7:24 PM EDT) -- A judge has ruled that six small banks are not entitled to coverage from BancInsure Inc. for losses suffered when money they loaned to music mogul Lou Pearlman, the former manager of the Backstreet Boys and 'N Sync now serving 25 years in prison for running a $300 million Ponzi scheme, was never repaid.

Magistrate Judge Carolyn Ostby of the U.S. District Court for the District of Montana on Wednesday granted summary judgment to BancInsure, finding that the banks' losses are not covered under the financial...
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